Profitability of islamic banks: evidence from Bangladesh

Abstract

The thesis investigates the impact of bank-specific factors on the profitable measures of Islamic Shariah based banks in Bangladesh for the period, 2014-2018. The sample contains bank level annual data of eight (08) Islamic commercial banks that are operating full-fledged in Bangladesh. The regression results show that loans and advances have a significant and positive impact on a bank's profitability. On the other hand, bank deposits have a negative and significant effect on profitability. Therefore, banks should expand their loan portfolio in economically viable projects. Secondly, banks should mobilize cost effective funds and deposits from alternative sources for investment. The findings of this study would help the bank management, investors, policy makers and other stakeholders for improving the performance of Islamic Shariah based banks in future.